Benzinga | Feb 23, 2021 10:29AM EST

Preview: Compass Diversified Hldgs's Earnings

On Wednesday, February 24, Compass Diversified Hldgs (NYSE:CODI) will release its latest earnings report. Benzinga's outlook for Compass Diversified Hldgs is included in the following report.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street analysts see Compass Diversified Hldgs reporting earnings of $0.37 per share on revenue of $429.29 million. Compass Diversified Hldgs reported a loss of $0.24 when it published results during the same quarter last year. Sales in that period totaled $387.00 million.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The Wall Street consensus estimate for earnings would represent a 254.17% increase for the company. Sales would be up 10.93% from the year-ago period. Compass Diversified Hldgs's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 0.27 0.06 0.19 0.42EPS Actual 0.08 -0.30 -0.26 -0.24Revenue Estimate 367.45 M 281.30 M 340.25 M 393.49 MRevenue Actual 418.90 M 333.63 M 333.45 M 387.00 M

Stock Performance

Shares of Compass Diversified Hldgs were trading at $23 as of February 22. Over the last 52-week period, shares are up 18.53%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Compass Diversified Hldgs is scheduled to hold the call at 17:00:00 ET and can be accessed here.